Corporate Crime and Investigations Radar

Rani John:
Hi everyone, welcome to this episode of our video series ABC Bites.

This series was prompted by the recent introduction of the corporate failure to prevent foreign bribery offence here in Australia. As many of our viewers will know, the UK has had in place a corporate failure to prevent bribery offence for over a decade. It's not identical to the Australian offence, but it is similar and the UK experience of dealing with that offence, I think, offers some useful lessons for Australian clients and thinking about the new offence here. Today, I'm joined by Judith Seddon and Neil Donovan, both partners in our disputes team in London and specialists in corporate crime matters. Both Judith and Neil have some great experiences and insights to share that I'm sure will be valuable for our viewers.

Judith and Neil, welcome.

Neil Donovan and Judith Seddon:
Hi Rani

Rani John:
So I wanted to particularly zero in today on how learnings from the UK can help Australian clients as they consider whether or not they've got adequate procedures to defend against the Australian offence.

Very briefly, under the new offence, companies are liable where theire associates commit the offence of bribing a foreign public official for the gain of the company, regardless of whether the company knew anything about that or not. However, the company does have a defence if it can show that it had adequate procedures in place to prevent the foreign bribery. The Australian government has recently issued some guidance on what adequate procedures may comprise.

Neil, I might start with you. The Australian guidance on adequate procedures and the UK Ministry of Justice's Guidance do seem fairly similar.

Are there material points of difference that stand out to you that might impact how a company tackles its anti-bribery compliance programme?

Neil Donovan:
Thanks, Rani. Yes, as you say, the Australian guidance largely mirrors the principles in the UK guidance. There are three points of difference which stand out to me that indicate that Australia has taken learnings from the UK experience. The first one is that the Australian guidance includes a non exhaustive list of six main indicators against which companies should assess the effectiveness of their ABC compliance programme and for each indicator, the guidance includes examples of the types of behaviours and practical steps they can take to demonstrate that the programme is effective in practice.
So these provide a useful starting point for companies in developing and operationalizing their procedures. The UK guidance lacks this practical detail and many companies here have struggled with working out how to assess the overall effectiveness of the programme. So for example, how does a company demonstrate a robust culture of integrity? Or what are the controls that can be implemented which will ensure effective oversights of third parties who are dealing with foreign officials? The Australian guidance really does provide some helpful tips on these points.
The second point is that the Australian guidance includes an additional stand alone pillar on reporting foreign bribery. There's a clear expectation that companies will adopt accessible and confidential mechanisms that encourage whistleblowers to report actual or suspected bribery, including for employees overseas. And the guidance also recommends that there's a response system to ensure appropriate investigation. So although these measures typically form a part of any good ABC compliance programme, it's interesting that the Australian authorities have decided to make this one of the central pillars of the guidance, and this will in turn, I think, place real emphasis on how companies respond to suspected incidents of foreign bribery.

And the final point I thought it was interesting is that Appendix B of the guidance states that where a company has identified an actual or suspected instance of foreign bribery, it should consider self reporting the incident to the Australian Federal Police.

There's no equivalent expectation in the UK guidance. That said, self reporting is a key principle in our deferred prosecution agreements code of practice. And importantly, the Australian guidance does make it clear that self reporting is not needed for a corporation to make use of the adequate procedures defence. But I think the fact that self reporting is addressed in the guidance is a clear statement of expectation by the Australian authorities.

Rani John:
Yeah, thanks Neil. Those last two points that you made probably partly reflect some of the specifics of the Australian landscape. So for example, here it's mandatory for public and large proprietary companies to have whistleblower policies in place. And when the Australian guidance was out for consultation, we and others made the point that the guidance should recognise that reality. As for self reporting, you may remember the original conception of our failure to prevent offence was that it would be accompanied in parallel by a deferred prosecution agreement regime. As it turned out, that didn't transpire, but I suspect that some of the encouragement to consider self reporting has its genesis in that in that history.

Judith, turning to you. Just reflecting on some of the enforcement activity you've seen in the UK in this space over the years, what practical considerations would you distil from that activity that helps companies think about whether or not they've got effective adequate procedures in place?

Judith Seddon:
Yeah, thanks Rani. In fact, there have been very few contested cases in the UK that we can draw upon, that shed light on what courts might consider adequate procedures to look like. The majority of the Section 7 bribery cases have been resolved by way of deferred prosecution agreements or through guilty pleas between companies and designated prosecutors. And so whilst in the DPA cases they do provide some detail on the extent of the cooperation and remediation that companies have taken following bribery, which have allowed them to avail themselves of a deferred prosecution agreement, there is no commentary on what would actually amount to adequate procedures to provide a defence.

What we do know from the one contested case that we have seen, the 2018 case of Skansen Interiors, is that self reporting and cooperating after bribery is detected will not on their own be enough.
In that case, Skansen was prosecuted for failing to prevent one of their senior employees from paying bribes to ensure that Skansen won the tenders for two office refurbishment contracts. This case went to a jury, Skansen argued that they had adequate procedures in place. They argued that despite there being no specific ABC policy at the time, there were a number of procedures for maintaining transparency and integrity. There were also anti-bribery clauses in the contracts in which the bribes related and the system for approving and settling invoices required multiple levels of approval. Evidence given at trial and email evidence showed that Skansen employees were aware that bribery was prohibited, and so Skansen argued that these checks and balances were sufficient for a company of its size. Only 30 employees, given its localised operation.

Furthermore, Skansen self reported to the NCA (the National Crime Agency) and cooperated extensively with the prosecutor in the ensuing criminal investigation, including by disclosing privileged material. But notwithstanding this, the jury decided that the controls in place were insufficient and convicted Skansen. The CPS (the Crown Prosecution Service) justified its decision to prosecute rather than pursue a DPA on the grounds that Skansen was a dormant company and could neither pay a fine nor comply with the terms of any DPA. And it wanted to send a message to smaller companies regarding the importance of having effective anti-bribery and corruption procedures in place rather than relying on company values to establish proper compliance and conduct.

Rani John:
Thanks Judith. We could have a whole separate discussion, I think, on how that outcome sits with what the guidance says about controls being proportionate to the company's circumstances. But perhaps we can save that for another day.

Changing focus a little bit. One potentially vexed topic is how to best deal with non controlled associates such as joint venture partners and the like within an anti-bribery compliance programme. What have you each seen in the UK which worked well on that front?

Neil Donovan:
Well, we would always recommend that robust contractual provisions are included in in the joint venture documentation or in agreements with non controlled associates.
It's standard practise to include comprehensive representations and warranties regarding historical conduct and the maintenance of effective ABC and compliance programmes. We've also seen stand alone provisions which enable clients to terminate the agreement in the event that they suspect that the counterparty has engaged in bribery and also audit rights to audit the activities of counterparties or to request information and documents where there is a concern. And in higher risk sectors we've seen clients see legally binding attestations from shareholders or directors of the counterparty to provide additional comfort.

Due diligence on the counterparty at the outset and on a periodic basis throughout the relationship is a key control and this should be informed by the risk profile of the joint venture or commercial partner. But iat a minimum companies should be conducting a form of desktop review and for higher risk relationships our clients often work with an intelligence firm to conduct a deep dive into the counterparty or associated individuals.

And finally, I would say it's important that business teams who are managing the joint venture and commercial relationship on a day to day basis are properly trained on ABC risks. For example, we often see individuals who sit as directors on joint venture boards receive additional targeted training so that they're able to effectively identify and escalate any red flags in a timely manner.

Judith Seddon:
I would also add that the extent to which these additional steps are required will always be a risk based decision. So looking at the UK Ministry of Justice Guidance, that makes it clear that the question of adequacy of bribery prevention procedures will depend in the final analysis on the facts of each case, including matters such as the level of control over the activities of the associated person and the degree of risk that requires mitigation. The MOJ guidance doesn't use the phrase as the Australian guidance does, of "non controlled associate". Instead, it deals with the scope of the term "associated person", and whilst noting that the definition is deliberately broad in scope, it also makes clear that each case will turn on its facts. For joint ventures, the MOJ guidance specifically states that the existence of a joint venture will not of itself mean that it is associated with any of its members, but it notes that the situation will be different where the joint venture is conducted through a contractual arrangement, because the degree of control that a participant has over that arrangement is likely to be one of the relevant circumstances that would be taken into account.

Of course, in addition to bribery related offences, JV partners must be mindful of money laundering risks related resulting from potential bribery issues. So in the UK, dealing in any way with proceeds of suspected bribery, for example, dividends or proceeds from a tainted contract may give rise to money laundering offences, regardless of whether the JV partner would be liable for the underlying bribery.
So where money laundering is an issue, consent providing a defence to money laundering can be sought from the UK's National Crime Agency.

Rani John:
Thanks, Judith, and thanks Neil. Those are some really useful insights on how you might think about adequate procedures encompassing non-controlled associates.
We might wrap it up there. If any of our viewers do have questions or would like our help in developing an ABC compliance programme, please do get in touch and otherwise we'll see you in the next episode. Bye.

Rani John:

Hi everyone, welcome to this episode of our video series ABC Bites. This series was prompted by the recent introduction of the corporate failure to prevent foreign bribery offence here in Australia. Today, I'm speaking with Steve Blackburn, a partner in Ashurst's Risk Advisory Practise. Steve has extensive experience advising clients on designing and implementing ABC compliance programmes.

Hi, Steve, thanks for joining.

Steven Blackburn:
Thrilled to be here. Thanks for asking.

Rani John:
So as many of our viewers will know, the Australian government recently issued some guidance on what might comprise adequate procedures which would serve as a defence to the new Australian corporate offence of failing to prevent foreign bribery. A key principle discussed in that guidance is that companies adopt a risk based approach to developing their ABC compliance programmes. Conducting a bribery and corruption risk assessment is obviously central to doing that because it enables the company to obtain a systemic view of where bribery and corruption risks might lie for it, and controls can then be designed appropriately commensurate to that risk.

So Steve, if I am working for an organisation that has no idea how to perform an ABC risk assessment, where should I start?

Steven Blackburn:
So there are a few steps I think you would take, Rani in that case. The first step I think would be to identify the key bribery and corruption risk areas within the organisation, within the operations of the organisation, in order to understand the inherent risk posed to the business. So some of the factors you would look at are the jurisdictions in which the organisation operates here and overseas. Traditional third party relationships such as vendors and suppliers, non traditional third party relationships like joint ventures and sponsorships, the sectors or business sectors in which the organisation operates. The types of transactions the organisation may encounter or participate in, and again the organization's employees.

Step two, I think, would then be to involve, consult and engage key stakeholders from across the business in units like legal, risk and compliance, operations and finance, to agree on what the fundamental bribery and corruption risks posed to the business are. So, key discussion points would therefore be what data do we have in the business to inform our bribery and corruption risk exposure? And should the business undertake a data availability assessment to understand the completeness and accuracy of that data, that can be used to inform the ABC risk assessment.

Step three, would be then to develop an approach to assessing the risk posed to the organisation and that's going to depend on the nature, size and complexity of the organisation. On one end of the spectrum we would typically see organisations take an approach, adopting or considering the likelihood of impact of the risk in a qualitative manner. On the other end of the spectrum, more mature and complex organisations may adopt a quantitative approach to assessing their risk through the use of weightings, for example. It's really important to make sure that your approach fits best to your business, the nature, the size and complexity of your organisation, because there really is no one size fits all approach. And then the final step would be to evaluate the effectiveness of the organization's ABC controls already in place. So how effective are those implemented ABC controls in mitigating the risks you've just identified?

Rani John:
Right. So it is certainly not a perfunctory exercise, or at least it shouldn't be. The guidance talks about rating the risk identified and documenting the process and findings of the risk assessment. What have you see work well on that front?

Steven Blackburn:
Well, the organisations that typically have a robust risk assessment process are often those that have documented methodologies in place which clearly outline the approach undertaken to identify and assess the inherent risks, the control effectiveness and the residual ratings. So, examples of key information that should be contained in the methodology would include the sources used to inform the risk assessment. The guidance that you mentioned Rani, published by the Australian Attorney General on adequate procedures to prevent the commission of foreign bribery and guidance and those published by the UK Ministry of Justice to help commercial organisations prevent bribery. Consider the rules and responsibilities in relation to the maintenance and performance of risk assessments, the periodic timeframe and trigger events to review the risk assessment methodology to ensure that it remains tailored to the nature, size and complexity of the business. The method by which inherent risk, control effectiveness and residual risk ratings are determined. How the residual bribery and corruption risk is aggregated and determined enterprise wide and how the outcomes of the risk assessment are utilised to inform the design of your ABC programme.

Rani John:
Great advice. More generally, what are some of the common mistakes that you see in the risk assessment phase and what are your suggestions for avoiding hopefully some of those mistakes?

Steven Blackburn:
Well, in my experience, a very common mistake revolves around thinking that an ABC risk assessment process is a one and done exercise or a one and done assessment. The assessment needs to continually evolve in response to triggers, such as changes to the business, legislative updates, regulatory guidance. Building in periodic timeframes and trigger events to review and conduct the ABC risk assessment is a must, so that appropriate controls are applied as the operating business environment and regulatory landscape changes. Another common mistake would be not having appropriate board and senior management oversight that you can evidence to regulators, especially over those outcomes. So, outcomes need to be reported to the appropriate governance forums so that the board and senior management are aware of the risks posed to the business and they can discharge their responsibilities and obligations in respect of those risks.

Rani John:
Thanks, Steve. That last point, I think also dovetails with another principle that's discussed in the guidance, which is having substantial involvement of what it refers to as top level management and there's a lot more to discuss on that front. But perhaps we'll leave that for another session. Thank you so much for insights today. To our viewers, please do get in touch if you have any questions or would like help with developing or updating your ABC compliance programmes and stay tuned for our next episode.

Rani John:

Hi everyone, welcome to the latest episode of our video series ABC Bites. This series was prompted by the recent introduction of the corporate failure to prevent foreign bribery offence in Australia. As many of our viewers will know, due diligence is an integral part of any proposed corporate transaction and in recent years it's become more common for Australian transactions to involve some specific anti-bribery and corruption due diligence. Today I'm joined by James Clarke, a partner in our dispute resolution team in Melbourne, and Natsuko Ogawa, a partner in our corporate transactions team in Melbourne. Both James and Natsuko have some useful observations about this particular type of due diligence and how it has evolved.

James and Natsuko, thanks for joining the session.

James Clarke:
Thanks for having us.

Natsuko Ogawa:
Thanks, Rani.

Rani John:
So, I'm interested in exploring today with you, how you've seen the attitude to anti-bribery and corruption due diligence evolve in Australian transactions and what impact do you expect to see as a result of the new failure to prevent foreign bribery offence.

Natsuko, I might start with you. What has your experience been as a corporate transactions lawyer of the importance of a focus on ABC due diligence in particular in the transactions that you've worked on over the last few years?

Natsuko Ogawa:
Thanks Rani. I have to say probably over the last decade or so, our global clients have become increasingly concerned about ABC, and that's particularly since the introduction of the FCPA and the UK Bribery Act, which obviously have extraterritorial implications as well. And so my sense is that, that has been increasingly an issue and in recent times we've seen it even further amplified I think by whistleblowing regimes that have come into effect in a number of jurisdictions and also just a general standard of uplift in terms of corporate governance expectations on global companies.

Rani John:
Yeah.

Natsuko Ogawa:
So that that's really heightened the interest in the subject. And then coupled with that, I would say that you know, it continues to be the case that our clients are very interested in reputational issues when they're doing deals and so ABC has become a very important part of that.

Rani John:
It's interesting to hear about the development of that over the years. James, turning to you. Now that the FTP offence has come into force in Australia, what impact do you anticipate that will have for risk assessment in corporate transactions?

James Clarke:
Thanks, Rani. I think the potential for companies to be automatically liable for foreign bribery or corruption where it's committed by their associates certainly does raise the importance of robust anti-bribery and corruption due diligence and that's, as Natsuko touched on a moment ago, both in the context of legal and reputational risks. It's particularly the case because any liability for historical misconduct will lie with the company that's been acquired, as part of the transaction rather than remaining with the former owners. Where there's particularly acute ABC risks, it might even encourage more purchases to occur of assets rather than companies, so that any potential liability won't follow.

More broadly than that again, as Natsuko touched on, I think it feels like there has been a growing awareness of the importance of ABC due diligence in corporate transactions in Australia over the last few years, and I think that's at least partly been driven by the proposed introduction of the failure to prevent offence. Which has been talked about for many years in Australia now and I expect we'll only see that focus continue to increase now that the reforms have actually come into operation.

Rani John:
Yeah, good point that it's a very long history as we know. Bribery and corruption by its nature, it does tend to be hidden from view and it's unlikely to be voluntarily revealed during the course of a due diligence exercise. Unless of course, it's already been detected or investigated by the target company. What approaches have you seen to address that particular kind of challenge when conducting due diligence?

James Clarke:
Yeah, you're right. That certainly can be a challenge for ABC due diligence. So, I think a combination of approaches is really needed to get a true picture of any potential risks. As with managing any due diligence for a company, getting an understanding of the business itself and any ABC risk factors in its operations is a starting point at least. That's likely to be supplemented by some targeted RFIs relating to a company's ABC practices and procedures to assess how well those risks are currently being managed. I also want to be asking questions specifically about whether or not there have been any historical ABC allegations, investigations or findings involving either the company itself or key personnel, and combining that with conducting our own searches of third party compliance databases to make sure that we're also doing an independent check and aren't just solely relying on information from the target company itself.

Beyond those inquiries, appropriate contractual warranties and indemnities in transaction documents can help to manage known or unknown ABC risks. But having said that, they might be of limited assistance to manage the time, cost and reputational consequences of a serious investigation or prosecution.

So, if a significant issue is identified during due diligence, there may be a real question as to whether or not the transaction should go ahead at all.

Rani John:
Yeah, thanks James. Natsuko, turning to you, let's say due diligence covering ABC and all other issues has been completed and the transaction goes ahead and the agreement is signed. What do you see as good practise in relation to ABC issues going forward from that point?

Natsuko Ogawa:
Yeah. I mean, typically even where a particular incident or issue is identified, often we would be recommending through that process that there might be some improvements that can be made around policies and procedures. For example, if you're dealing with an entity that's coming into a corporate group, you might look to standardise the policies and procedures to align them with the head office policies and procedures or there might just be a general need to uplift the policies and procedures, perhaps as a result of changes in law and increased expectations.

So, when we make those recommendations, what we don't want is for people to put the due diligence report into a drawer and forget about them. So, good practice would be, along with all of the other post-completion recommendations that we would be making. We would highly recommend that our clients keep that list of items including obviously the important ABC policies and procedure uplift and potentially things like training as well, very close to them in those first few months after completion and really systematically go through and execute on those recommendations if they see fit.

The implications, I guess of an issue coming up down the track, you know, say 12 months after completion or two years afterwards, where they haven't actually gone and done that. The directors of the company would be very concerned that they haven't actually put in place adequate procedures to actually discharge their duties. So, quite often as a post completion item, we'll get contacted by clients saying, you know as James said, it wasn't possible to detect something in due diligence, but someone's reported it, an issue through the whistleblower regime or something like that and it goes to the board and the board says "Oh, what can we do now?" It's not too late, but it would be very unfortunate because they've put themselves in a vulnerable position at that point that they hadn't followed through with those recommendations to ensure that actually they did have adequate processes in place.

Rani John:
Yeah, thanks Natsuko. So, ideally the transaction serves if you like, as an opportunity for the improved approach to deterring ABC issues or dealing with them effectively, if they do arise, and I'm sure there's a cultural overlay as well as part of a larger exercise of, you know, alignment of corporate culture between the target and the acquirer.

Natsuko Ogawa:
Yeah, absolutely, yeah.

Rani John:
Yeah. James and Natsuko thank you so much for your insights, and thanks to our viewers for joining us today. If you do have any questions about ABC issues, please do get in touch and we'll see you next time. Thank you.

Rani John:

Hi everyone. Welcome to the latest episode of our series, ABC Bites. The series was prompted by the recent introduction of the corporate failure to prevent foreign bribery offence in Australia. Today I'm joined by Cath Pedler and Kirsten Scott, both from our Perth office. They're both investigations partners who have assisted clients navigate bribery and corruption issues in the energy and resources sector, and today we're going to talk about how ABC issues can arise in those sectors and steps that you might take to support an adequate procedures defence to the new failure to prevent offence. Cath and Kirsten, welcome.

Catherine Pedler:
Hi Rani, thank you.

Rani John:
Cath, to help set the scene, what are your observations about the features of the energy and resources sectors that make ABC compliance particularly important?

Catherine Pedler:
Thanks, Rani. There are a few important factors that are present in many projects in this sector that give rise to bribery and corruption risks. So first, companies will often be operating in high risk jurisdictions with historically poor compliance records. Secondly, at several stages of the project life cycle, clients will be interacting with government agencies or representatives for approvals and support to get their projects off the ground and keep them running effectively and thirdly, in many instances, clients will be relying on third parties to undertake activities on their behalf. For example, joint venture partners, contractors and others over which they don't have complete control. Left unchecked, these factors can combine to expose clients to bribery and corruption risks even where they may not be directly involved in the corrupt activity. And for that reason, the new failure to prevent foreign bribery offence and the corresponding needs to have adequate procedures in place will be highly relevant to entities which are operating in this sector and engaging third parties to represent them.

Rani John:
Thanks, Cath and perhaps can you share some examples that illustrate how these issues can play out in this sector.

Catherine Pedler:
Of course. So, we are seeing some really high profile cases in this sector in recent years. For example, just last year an ASX listed mining company agreed with the AFP to orders providing for a monetary penalty as well as disgorgement of profits received pursuant to mining rights in Cambodia, which was secured by the payment of bribes. And that was an unusual example of the CDPP deciding not to initiate criminal proceedings based on public interest factors. In that case, that was likely to have been because of the fact that the company self reported.

In 2022 a multinational commodity trading and mining company pleaded guilty and agreed to over $1.1 billion U.S. in fines and disgorgement in connection with a 10 year scheme to pay bribes via intermediaries, including to secure various government contracts. And that case was the culmination of an investigation across multiple jurisdictions, including the U.S., the UK and Brazil, which is common in this area.

Bribery and corruption issues will often touch on multiple jurisdictions, and the long arm of the law in this area, in many cases leads to parallel investigations across a number of jurisdictions and bearing in mind the new corporate failure to prevent offence. A key feature of this case was that not only was senior management aware of the conduct, but it was found to have tolerated and in some cases encouraged it.

Rani John:
Those are some really interesting examples. Just picking up on some of the themes there. First of all, the role of senior management. The recently issued Australian Government guidance on adequate procedures that can be a defence to the corporate failure to prevent offence, emphasises the need for meaningful engagement and involvement from top level management. Kirsten, turning to you, can you talk a little bit more about what the guidance on adequate procedures has to say on that topic?

Kirsten Scott:
Thanks, Rani, sure. Now the guidance on adequate procedures provides a really useful overview of the steps all companies can take to ensure that their anti-bribery controls are fit for purpose. A key emphasis is as you indicated, the importance of senior leadership, including the executive team and the board of directors playing a role in the development, implementation and promotion of a compliance culture and those anti-bribery and compliance programmes that sit under it.

The guidance also emphasises the need for assessment by companies on a case by case basis, as to what adequate procedures represent for them, and this will obviously differ based on, for instance, the size and sophistication of each company and other factors like the need to comply with complementary obligations under the ASX listing rules or the Corporations Act, in addition to the guidance.
As you'd imagine, this need for case by case approach in the guidance is particularly pertinent, where in this sector you've got everything from small-cap miners to giant multinationals, and where companies might be operating or have interests in a range of jurisdictions that differ in compliance frameworks and geopolitical influences.

Rani John:
Thanks Kirsten. On a practical level, what have you seen work well for companies in these sectors in setting an appropriate tone from the top?

Kirsten Scott:
So, as a practical matter, exactly how top level management visibly leads the development and implementation of an ABC programme will obviously differ between those small and large companies.
Having said that, I'd say that regardless of size, it should include things like ensuring that senior leadership has conveyed its dedication to an effective anti-bribery and compliance programme, and efforts to make sure that it's front of mind and accessible in a manner that illustrates how it's relevant to day to day employees, particularly those with operational roles.

Now, on the energy and resources sector, which may see a large number of employees based in remote locations, including some where access to communications are more difficult. Senior management will need to carefully consider how to ensure those communications and training are delivered in a manner that is practicable for these circumstances. Now this might include taking into account educational levels of the workforce, the languages spoken or what access to technology looks like and making sure what the policies in those environments are accessible and tested against the realities of those particular work environments.

Rani John:
Thanks Kirsten. Senior management taking responsibility is one of a number of principles identified in the guidance of adequate procedures. Cath, can you touch on some of the others that are discussed in the guidance?

Catherine Pedler:
Of course, Rani. So, some of the other principles identified in the guidance are fostering a control environment to prevent foreign bribery. Risk assessment, communication and training, reporting foreign bribery and monitoring and review. Now, I don't expect that any of these will come as a surprise for our clients, however one issue that we expect companies in the energy and resources sector will need to grapple with is how they are implementing an appropriate adequate procedures framework in the context of their arrangements with third parties acting on their behalf. As I mentioned earlier, generally speaking major energy and resources projects are underpinned by complex joint venture, financing and contractual arrangements. The new failure to prevent bribery offence has the potential to increase an entity's exposure to bribery offences far beyond their own conduct and that of their employees and officers, and to capture conduct that may be undertaken on their behalf by these third parties. It's therefore super important that any adequate procedures extend to procedures that include reasonable and appropriate measures to prevent bribery and corrupt conduct by any third parties.

Rani John:
Kirsten back to you, extending and ABC compliance program to third parties can be challenging, as we know. What do you consider to be some of the key points to take into account for energy and resources companies in particular on that front?

Kirsten Scott:
Thanks Rani, now as with any of the adequate procedure considerations, an assessment needs to be made on a case by case basis and procedures should to be proportionate and appropriate for the circumstances. At a minimum we would expect some level of due diligence to be conducted with respect to potential joint venture partners and other third party contractors looking to be engaged, and we also commonly see anti-bribery and corruption compliance addressed in the contractual arrangements. That might be for example by way of contractual warranties as to compliance records and potential notification obligations and termination rights where there are any ABC issues, whether connected with a particular project or not, identified during the term of the contract. Now coupled with all of this, its important that the tone from the top and a compliance culture filters down to those who deal with the third parties on a day to day basis. So that there is ongoing monitoring of the conduct of the relevant third party and there is a really clear pathway to raise concern internally so they can be addressed at the appropriate level.

Rani John:
Yeah, and I have seen in some instances companies including third parties in their training programmes, or other forms of inclusion to try to achieve an aligned compliance culture between the entity and the third party. Cath and Kirsten, we might leave it there. Thank you so much for your insights today. If our viewers have any questions about ABC compliance issues, please do get in touch.